Rapid advances in technology are making it more challenging to predict the numbers and nature of jobs in the future. For India to address this dynamic trend, job creation must stand at the center of all policy-making, according to the report ‘Future of Jobs in India – Enterprises and Livelihoods’ brought out by CII in December.
The report was prepared after months of consultations with over 170 experts and stakeholders, with the participation of the Department of Industrial Policy and Promotion (DIPP), and in association with the Boston Consulting Group, India. Guided by Mr Arun Maira, Former Member, Planning Commission, it offers directional strategies for promoting the creation of jobs by identifying emerging trends in technology and education, and the unique characteristics of enterprises in India.
The report was developed through a structured ‘systems approach’ of problem-solving, and outlines three potential scenarios for the next 10-15 years, depending on current policies. It goes beyond accepted theories to introduce new ideas and directional changes for job creation. The report identifies eight drivers of job creation and seven imperatives of ‘what to do’ and ‘how to do.’ Such a systems approach can add 2-3 percentage points to the GDP growth rate, it says. Every year, 10-12 million young people join the labor force, and millions more leave agriculture, thus necessitating the creation of 17-20 million jobs per annum. With much fewer jobs actually created in the last 5-10 years, the cumulative impact and future job needs must be considered together.
Networks and Clusters Effective
Clusters, both geographic and virtual, can develop the capabilities of small enterprises and enable citizens to earn incomes with less capital expenditure, suggests the report.
The quality of small enterprise associations and clusters must be substantially improved. Giving the example of Ola Cabs and OYO Rooms, it says Government policies should aim to strengthen and enable digital technology platforms and communications networks to empower small and micro enterprises, with large firms serving as strong catalytic nodes. The Government must ease constraints on the growth of small enterprises and develop enterprise learning architectures which can help them to avail of shared services such as staffing, financing, quality management and so on. Innovative business solutions of small enterprises must be recognized and scaled up.
New technologies and new industries are changing the shapes and sizes of enterprises. The formal education system must be supplemented by ‘just-in-time, needsaligned’ learning modules which provide necessary skills on an on-going basis to workers, recommends the ‘Future of Jobs’ report. Dynamic training programs that can be offered in short time periods and meet the needs of an evolving production system are best offered by private enterprises.
Such learning formats require the larger participation of employers in systematic skill development and should be affordable and accessible for workers.
Social insurance and innovative financing can help build a strong security net for workers. The current system of voluntary acceptance of social security measures such as pension and insurance can be made mandatory. It is estimated that about 0.34% of GDP will be required over a five-year period for coverage to unorganized sector workers, a large majority of the workforce. Instituting a comprehensive social security system will give enterprises the flexibility to remain competitive, expand, and create more jobs, observes the report.
Technology, an enabler
Technology and communications outreach can be effectively deployed to bring more workers into the system, as also increase their productivity. Technology can connect enterprises in strong networks, enable justin-time, needs-aligned delivery of education and skilling, and drive access to finance. The report suggests that the policy agenda should target quick access to digital connectivity, effective regulations on security and privacy, and identification of emerging technologies where India can become a leader.
Linking the urban and rural economies through the flows of natural produce can create a number of jobs. Regional planning through an empowered institutional system would accelerate this process. Strategic investments in infrastructure such as transport and housing would link workers with employment opportunities. The Atal Mission for Rejuvenation and Urban Transformation (AMRUT) should be allocated more funds to develop smaller towns as economic hubs.
In rural areas, self-employment can be made more effective through aggregation in cooperatives, clusters, and provision of common ser vices. Corporate engagement in key sectors such as food processing, transport and storage, is necessary to support rural transformation. Natural produce such as dairy, livestock, and non-timber forest produce, along with agriculture, needs strong policy focus. The Future of Jobs report elaborates on three key sectors that have large potential for creating jobs in India in the next few years: tourism, healthcare, and natural infrastructure in the form of renewable energy, water and sanitation.
With strong focus on how to develop policies for job creation, the report calls for a ‘whole of Government’ approach to coordinate the design and implementation of policies. Systematic methods for multi-stakeholder policy formation such as ‘Regulatory Impact Analysis’ and ‘Capacity Works’ will speed up job creation outcomes, it says.
The ‘systems approach’ to job creation can deliver ‘Widespread Growth’, one of the possible scenarios developed in the report, which will accelerate widespread job creation, as well as boost GDP growth by 2-3%. In its absence, scenarios of ‘Enclaves of Prosperity,’ with increasing inequality, as well as ‘Growing Dissatisfaction’ could emerge, warns the report.
Source: CII Communique January 2017